Taxes don’t retire when you do - and for many - they can become one of the biggest drains on a nest egg. That’s the message from Phil Huff, a partner at Golden Reserve, LLC. He appeared on “Live In The D” to talk about attacking retirement taxes before they attack you.
“I don’t think the industry prioritizes it as a whole,” Huff said, noting many advisors fixate on growing accounts while overlooking how to keep more of that money in retirees’ pockets. “Growing your money is important, but it’s also important to have a plan on how you keep that money with you.”
The blind spot often starts with well-intentioned deferrals. Many retirees avoid touching their IRAs to save on taxes today, letting balances compound - and, with them, their future tax bill. Huff calls it a “big tax bomb” waiting down the road.
Two costly pitfalls can follow. First is the “widow’s penalty,” when a surviving spouse must keep taking required distributions but now files as single - often paying higher taxes on the same withdrawals. Then come the “kiddos” consequences: heirs who inherit IRAs typically face compressed timelines and higher tax brackets during peak earning years, potentially paying two or three times more in taxes than Mom and Dad ever did.
Golden Reserve’s IRA tax plan maps out when - and how much - to take from IRAs each year, whether the client needs the cash or not. If income isn’t needed, Roth conversions or reinvestment can keep the strategy moving without leaving money idle in tax-deferred accounts.
“This plan is to avoid those penalties completely,” Huff said. “Let’s figure out how much we should take out every year, pay the tax at that lower joint rate in retirement so we can avoid that widow’s and kiddos penalty.”
To watch the segment, click on the video above. For more information, you can call 313-888-8884.
Disclaimer: The information provided is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Financial instruments involve risk. Actual customer results may vary. Subject to full terms and conditions available at: goldenreserve.com.